If you’re based in the UK and wish to buy and sell shares, you’ll need to use an online stock broker. To process is simple – and merely requires you to open an account, deposit funds, and choose which companies you want to invest in. With that said, there are hundreds of stock trading platforms now serving UK investors, so knowing which broker to sign up with can be difficult. In this guide, we review the best 5 UK stock brokers of 2020. We also give you some handy tips on how to choose a platform that best meets your investment needs. On this Page:Contents [show] Our Recommended UK Stock Broker If you’re keen to start buying and selling shares right now, below you will find our top-rated UK stock broker of 2020. This FCA-regulated platform allows you to get started in minutes by opening an account and depositing funds with a debit/credit card, e-wallet, or bank account. Once you do, you’ll have access to hundreds of UK and international stocks. eToro - Top UK Stock Broker Our Rating 1000+ shares to Buy or Trade as CFDs Social and Copy Trading Offered Accepts Paypal Friendly platform for beginners CySEC, FCA and ASIC regulated Visit Site 81% of retail investor accounts lose money when trading CFDs with this provider. Best UK Stock Broker Accounts of 2020 With hundreds of UK-based stock brokers operating in the online market, we managed to get our list of recommended platforms down to just five. This required countless hours of independent research to ensure you are accustomed to the very best. As such, all of the UK stock brokers listed below are regulated, offer heaps of everyday payment methods and crucially – give you access to a wide range of publicly-listed companies. Note: Don’t have any experience of choosing companies to invest in? If this is the case, you might be better suited for a stock market index. This allows you to invest in hundreds of companies through a single trade, meaning you can easily create a diversified portfolio of stocks. 1. eToro - Best overall UK stock broker eToro ticks virtually every requirement that we look for in a UK stock broker. First and foremost, the platform is regulated on multiple fronts. This includes the FCA, ASIC (Australia), and CySEC (Cyprus). You can open an account in minutes, and verify your identity by quickly uploading a copy of your passport or driver's license. Then, you can instantly deposit funds with a debit/credit card, Paypal, Skrill. Neteller, or a local bank transfer. Once you're all set up, you'll have access to heaps of stocks. In the UK market, this includes the London Stock Exchange and AIM. Regarding the latter, this is a UK-based stock market for small-to-medium companies. Out of the UK market, eToro hosts hundreds of internationally-listed stocks. This includes the NYSE and NASDAQ in the US, so you can easily invest in global companies like Apple, Netflix, Facebook, Nike, and Disney. You'll also find stocks from small exchanges around the world, such as those listed in Hong Kong, Canada, Australia, and Singapore. In terms of the fundamentals, eToro does not charge any trading commissions, so you can invest on a fee-free basis. You will, of course, need to factor in the spread. We also like eToro because you have the option of buying stocks in the traditional sense, or via CFDs. If you opt for the latter, you'll have the option of short-selling stocks, and even applying leverage. You'll be capped to leverage of 5:1 when trading stocks as a UK investor - as per the regulations set out by ESMA. Finally, the broker offers a Copy Trading feature, which allows you to mirror the trades of other eToro users. Assets: Cryptocurrencies, Stocks, CFD, Forex, ETFs, Commodities Demo Account: Yes Educational Material: Great educational material for both beginners and advanced traders Fees: $5 Withdrawal Fee, $5 Inactivity Fee, No Account Fee, No Deposit Fee Minimum deposit: $200 (£160) MT4/MT5: No Special Features: Copy trading and social trading site Regulation: CySEC, FCA, ASIC, MiFID Payment methods: Credit/debit card, Paypal, Sofort, Rapid transfer, Skrill, Wire transfer, Neteller, WebMoney, UnionPay Our Rating Social trading leader Best mobile trading site Paypal accepted Limited technical analysis tools Not well-suited for the more advanced investor Visit eToro 75% of retail investors lose money when trading CFDs with this provider How to Choose a UK Stock Broker? Let’s explore some of the metrics that you need to look out for when choosing a platform. Crucially, we always suggest performing your own research prior to opening an account, as this will ensure that the stock broker meets your personal needs. For example, while your chosen broker might offer super-low fees and commissions, it won’t be suitable if it doesn’t support your preferred payment option. To help you along the way, you’ll find 10 factors listed below that must be considered before signing up with a new UK stock broker. UK license The most important metric that you need to look out for is whether or not the platform is regulated by the UK’s FCA. This ensures that the broker keeps your funds in segregated bank accounts, and complies with all UK laws on retail stock trading. If it isn’t regulated by the FCA – and it claims to serve UK clients, you should simply walk away. As is the case with the five recommended UK stock brokers listed on this page, trading sites often hold additional licenses. Common examples include ASIC, CySEC, and MAS. Supported Stocks and Shares It’s best to choose a UK stock broker that lists hundreds, if not thousands of companies to invest in. Sure, the broker might host the specific stock that you are looking to buy right now, but there might come a time where you want to add additional companies to your portfolio. As such, check to see what stock exchanges the broker has access to. This should include the UK’s London Stock Exchange at a minimum, as well as international markets like the NASDAQ and New York Stock Exchange. One of the brokers with the biggest variety of supported stocks and shares is Plus500, offering 2,000 markets to trade. Some brokers will also offer access to less liquid markets, such as those in Hong Kong, Singapore, and Australia. Payment Methods Be sure to explore what payment methods the broker supports to ensure your preferred option is available. We prefer UK stock brokers that offer a combination of debit/credit cards, e-wallets, and a bank transfer. Trading Fees and Commissions UK stock brokers are in the business of making money, so it’s best to choose a platform that offers competitive fees. This is typically split between trading commissions and the spread. For example, while eToro offers zero-commission trades, its spreads are slightly higher than the industry average. At the other end of the spectrum, platforms like IG give you access to real market prices, so there are no spreads on stocks and shares. However, you will need to pay a 0.1% commission. As such, choose a fee-structure that best meets your long-term investment goals. Leverage and Short-Selling If you’re looking trade with more money than you have in your account, you will need to use a stock broker that offers leverage. While all of the platforms listed on this page allow you to trade on leverage, you will be capped by the limits imposed by ESMA. This means that you can apply leverage of up to 5:1 when trading stocks and shares, on platforms like eToro. Similarly, if you want the option of short-selling a company because you think its price is likely to go down, you will need to use a UK stock broker that supports CFDs. Once again, this is something offered by all of the platforms that we have recommended on this page. Customer Support You should explore what the stock broker’s customer support department is like, as there might come a time where you need assistance on your account. Support is usually offered via live chat, email, or the telephone. In terms of operating hours, most brokers offer customer support on a 24/5 basis – meaning they are closed over the weekend. Educational Material If you’re here reading this guide as an inexperienced investor, you’ll want to choose a UK stock broker that offers heaps of educational material. This might come in the form of step-by-step guides, webinars, videos, or trading tips, and ideally one that has a stock market app available on iOS or Android for trading on the go. Automated Trading Features Some of you might be super-keen to invest in the stock markets, but you simply do not know where to start. By this, we mean you have no idea which companies to invest in, as you’re completely new to the investment space. If this is the case, we would suggest using a UK stock broker that offers a Copy Trading feature. At the forefront of this is eToro. In a nutshell, this allows you to copy the trades of other eToro users like-for-like. Not only can you select the specific trader that you wish to copy, but you can also choose the size of your investment. Stock Ownership or CFDs You need to understand whether your chosen stock broker allows you to buy and own shares, or trade stock CFDs. In cases such as eToro, you have the option of doing both. Nevertheless, this is important, as it will dictate whether or not you are entitled to shareholder rights like dividends. While buying stocks 100% outright affords you this benefit, CFDs do not. On the flip side, CFDs allow you to apply leverage and/or go short on a company, while traditional methods do not. As such, think about what your long-term trading strategy looks like, and choose a broker accordingly. Withdrawal Times You should also explore what the broker’s withdrawal policy looks like. In other words, how long does the broker take before they authorize a withdrawal request? This is important, as you don’t want to sign up with a platform that takes days-on-end to release your money. Instead, opt for a broker that offer super-fast withdrawals. In doing so, you’ll be able to liquidate your stocks quickly in the event you experience a short-fall in cash. Conclusion The UK stock trading industry now consists of hundreds of platforms. While this is good news for you as a retail client, this can make it difficult to know which broker to sign up with. As such, we hope our guide has cleared the mist for you. When choosing a stock trading platform, consider on FCA-regulation, low spreads and commissions, support for everyday payment methods – and a stock library that contains thousands of shares across dozens of markets. Ultimately, regardless of which UK stock broker you decide to join, make sure that you understand the risks of trading. This is especially the case when buying and selling CFDs, applying leverage, or short-selling – as most newbie traders fail to understand the complexities of the underlying product. eToro - Top UK Stock Broker Our Rating 1000+ shares to Buy or Trade as CFDs Social and Copy Trading Offered Accepts Paypal Friendly platform for beginners CySEC, FCA and ASIC regulated Visit Site 81% of retail investor accounts lose money when trading CFDs with this provider. FAQs What are UK international stock brokers? As the name suggests, UK international stock brokers not only allow you to buy shares listed on the London Stock Exchange, but international markets, too. This is likely to include the New York Stock Exchange and NASDAQ - which is where you'll find companies such as Apple, Facebook, Ford Motors, and Disney. What are the best stock brokers for beginners UK? If you're an absolute newbie to the world of stocks and shares, you might be best to use an online platform that offers a Copy Trading feature. Through FCA-regulated broker eToro, the feature allows you to copy the trades of experienced investors - so there's no requirement to have any knowledge of how trading actually works. Are there any penny stock brokers UK? This depends on how you define a 'penny stock'. For example, if you're looking to access penny stocks on OTC markets like the Pink Sheets, you'll find it very difficult as a retail client. However, if you're looking to invest in small companies with a low market cap, eToro hosts multiple niche exchanges. This includes companies listed in Spain, Sweden, France, Hong Kong, and even Saudi Arabia. Where can I find the cheapest stock brokers UK? If fees are your main concern, it might be worth using a commission-free stock broker like eToro. In doing so, it's only the spread that you will pay when buying and selling stocks. What are discount stock brokers UK? Online stock brokers that market themselves as discount platforms specialize in offering industry-leading trading fees. In return, the platform will likely offer a 'skin and bones' service that lacks top-notch customer support, research tools, or educational materials.
